CNBC The Exchange
2026-05-25 · Hosted by Kelly Evans · CNBC
Executive Summary
The Exchange covers the White House swearing-in of Kevin Warsh, OpenAI’s confidential IPO filing preparation, semiconductor sector momentum (Intel up ~140% over the past month, IBM’s best week since 2001 on quantum investment), and warning signs of speculative excess in non-profitable tech stocks. Former Fed Governor Larry Lindsay argues the Fed needs at least 50–100 basis points of rate hikes given core PCE running at a 4.4% annualized pace over the last three months. A Red Point Ventures investor discusses OpenAI’s path to a $1T+ IPO, and Morgan Stanley’s Andrew Slimen flags the Goldman Sachs non-profitable tech index rising 38% this quarter as a euphoria warning sign.
Key Stories & Changes
1. Kevin Warsh Sworn In — Reform Agenda and Rate Outlook
White House ceremony; first in nearly 40 years since Greenspan
Megan Casella (from White House): appreciative crowd; standing ovation for Warsh; Trump said “that means they like you” pointing to Dow up 600 points at the time
Larry Lindsay (former Fed Governor, CEO of Lindsay Group): most hawkish take of the day — core PCE annualized at 4.4% over last three months (3.7% over six months, 3.2% over 12 months = accelerating trajectory)
“The neutral Fed funds rate is between 4.2 and 4.7%; we need at least 50 bps to get to the lower bound of neutral”
Prefers traditional route of Fed funds rate over balance sheet manipulation; calling balance sheet approach “new and radical” for an incoming chair
Some price pressures are transitory but core PCE ex-energy is not
Warsh statement: “Reform-oriented Federal Reserve, learning from past successes and mistakes both”
Kelly Evans: Warsh faces highest 10-year yields at swearing-in since Greenspan
2. OpenAI IPO — Filing Expected Soon
CNBC sources: OpenAI could file confidentially as soon as this Friday; target public debut around September
Wall Street IPO valuation estimate: >$1 trillion (would be world’s 14th largest company, behind Berkshire, ahead of Eli Lilly)
Erica Brescia (Red Point Ventures, OpenAI investor): latest quarterly revenue at $5.7 billion — ahead of Anthropic; together OpenAI + Anthropic hold approximately 89% of the AI market
Company losing money but capital intensity explained by need to build data centers 3–4 years ahead of demand for a multi-decade infrastructure build
Confidential filing “just gives them the option”; timing depends on other IPO market signals
Still “very early days” in enterprise AI, pharma, robotics — massive usage still to come
3. Chip Sector — Intel and IBM Lead the Charge
Intel up ~140% over the past month; portfolio manager Jeff Kilberg (KKAM Financial) holding at ~$121; position grew from 2.5% to 6% weighting; not selling despite 111× forward P/E
Original bull thesis: cloud computing (No. 3–4 globally); current catalyst: quantum computing + government manufacturing grants
IBM best week since 2001 — up 16% this week
US government investing $2 billion in quantum computing; IBM receiving $1 billion of that
Kilberg: owned IBM for 3 years; quantum now accelerating the thesis
Semi ETF (SLXX) up 80% with AMD up 80% as biggest holding; trimmed AMD due to size; maintaining Intel
Kelly Evans observation: “endlessly amusing to see all these old names coming back and leading the way”
4. Market Breadth Warning — Non-Profitable Tech Surge
Andrew Slimen (Morgan Stanley Investment Management): key warning sign = Goldman Sachs non-profitable tech index up 38% this quarter vs. S&P up 15%
“Those are the euphoria stocks”
When Fed started hiking in 2022, that same index dropped 78%
Signal: market is “a lot more vulnerable now to bad news” than a month and a half ago
S&P cap-weight up ~9% since Iran War; S&P equal weight essentially flat — narrow leadership
Equal-weight consumer discretionary “rolling over really sharply” — pricing in high oil prices hurting consumer
Financials: great earnings, estimates revised up, but stocks “have gone nowhere” = opportunity identified
5. Software Divergence — Workday Soars, Intuit Sinks
Workday: Beat + raised — +5%; full-year profit margin raised — AI agents doubled Q/Q; 4,000+ clients using at least one
Intuit: Missed expectations — -20% then partial recovery — TurboTax revenue decelerated YoY; 3,000 layoffs announced
Key distinction: Workday and Zoom showing real AI adoption by existing customers; Intuit showing competitive disruption risk from LLMs in tax filing
VTIG analyst: customers “not looking to build payroll/HR software with AI labs” yet — Workday disruption risk still limited in near term; OpenAI/Anthropic aggressively poaching software sales executives as longer-term signal
6. Tulsi Gabbard Resignation
Gabbard resigning as Director of National Intelligence to support husband battling rare bone cancer
Fourth cabinet official departure in three months (following Christy Nome, Chavez-DeRemer, Pam Bondy)
No immediate successor named
Trends Identified
1. Speculative Excess Is a Warning, Not a Ceiling
Andrew Slimen’s non-profitable tech index data (+38% in one quarter) is the episode’s most concrete market structure warning. The 2022 precedent — that index fell 78% when the Fed hiked — is directly applicable to current conditions if Warsh is forced to act on rate hikes. The market is more vulnerable to bad news now than at any point since the Iran War recovery began.
2. OpenAI IPO Is the Trillion-Dollar Demand Test
With an implied $1 trillion+ valuation and large ongoing losses, OpenAI’s IPO will be the most significant test of investor appetite for AI infrastructure companies. Red Point Ventures’ Brescia frames the losses as necessary infrastructure investment 3–4 years ahead of demand — a bull case that requires believing in the sustained multi-decade diffusion of AI. The September target window means this test comes during a period of potential Fed policy turbulence.
3. Larry Lindsay’s Rate Hike Case Is the Market’s Most Uncomfortable Truth
Lindsay’s math is simple and uncomfortable: with core PCE accelerating to 4.4% annualized, the neutral rate is 4.2–4.7%, and current Fed funds rate is below the lower bound. The market has not priced this scenario, and if Warsh concludes the same analysis, the non-profitable tech index could reprice violently. Lindsay’s “50–100 bps over this year and next” scenario would be the most disruptive market event of 2026.
4. Old Blue Chips Are the New Growth Story
IBM’s best week since 2001 and Intel’s 140% run are not accidents — they reflect the US government’s conscious decision to fund quantum computing and chip manufacturing as strategic industries. Kilberg’s observation about “all old US blue chip names coming back” captures a real regime shift: government capital is flowing to established infrastructure players rather than newer pure-play tech names. —-
Sentiment Analysis
Overall Market Sentiment: Bifurcated — Bullish on AI Infrastructure, Cautious on Breadth
Strong gains in specific AI infrastructure and old-economy tech names coexist with warning signs about speculative excess and deteriorating consumer conditions.
Risk Factors Highlighted
Core PCE at 4.4% annualized (accelerating): Larry Lindsay’s data shows inflation not just elevated but accelerating over 3-month, 6-month, and 12-month windows — the most concerning inflation configuration.
Rate hikes of 50–100 bps: Lindsay explicitly calls for this level of tightening; if realized, non-profitable tech (currently +38% Q/Q) could fall 78% as in 2022.
Non-profitable tech euphoria index: Goldman Sachs index of money-losing tech up 38% this quarter = historically reliable warning of market vulnerability.
OpenAI bankruptcy risk rebuttal needed: As recently as January, mainstream analysis questioned OpenAI’s viability; massive losses and Google’s Gemini competitive pressure remain real risks at a $1T+ valuation.
Narrow market breadth: S&P cap-weight up 9% since war; equal-weight essentially flat; consumer discretionary rolling over — suggests fragility beneath headline strength.
Workday/Intuit divergence signals future disruption: OpenAI and Anthropic poaching software sales executives is an early indicator of an enterprise AI land grab that will eventually hit Workday and Salesforce.
Cabinet turnover: Gabbard’s resignation is the fourth cabinet departure in three months; administrative instability adds uncertainty to policy continuity.
Oil inventory crisis: US stockpiles fell by a record 17.78 million barrels last week; distillate inventories at lowest since 2003; even a deal with Iran may not prevent “higher for longer” energy prices.
This episode was covered in today’s The Market Signal — 2026-05-25, a cross-source synthesis of multiple podcast reports.